Posts Tagged ‘APEC’

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Remanufacture = Reduce, Reuse, Recycle

July 31, 2012

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Tyler Voorhees is working in the Office of Public Affairs at the International Trade Administration for the summer. He is a junior at Washington and Lee University in Lexington, Virginia.

In day to day life, most of us usually imagine new goods when we think about buying anything. But that ignores an entire group of goods that we call “remanufactured goods,” which is just a generic term that describes a product that goes through a recovery process where it is transformed through cleaning, testing and other operations so that it meets the same specifications as a new good.  Pieces subject to wear are replaced or processed to restore original performance while housings and other components are cleaned and reused to preserve their value.  Remanufactured goods are therefore not old consumer goods sold as is, like an old radio from a thrift store. They are products that are just as good as a newly manufactured good, but less expensive!  In addition to the cost savings, the process has important environmental benefits.

Opening markets for remanufactured products has been an important ITA goal.  While remanufactured goods dominate important market segments in the United States and account for roughly 90 percent of automotive parts sales in most wear part categories, many countries try to limit imports of remanufactured goods through barriers such as outright bans. Others force remanufactured goods to meet restrictive licensing requirements.  This is because many countries associate remanufactured goods with used goods and waste, so ITA is working with industry and colleagues in the U.S. government to educate countries on the benefits of remanufacturing. 

The United States has brought the issue of remanufactured goods to the World Trade Organization (WTO) to try and make trade in remanufactured goods more open and is now working with countries in the Asia-Pacific Economic Cooperation (APEC) on a “pathfinder” process designed to familiarize countries on the benefits and quality of remanufactured goods.  We are also working bi-laterally with major trading partners like China to open their markets to remanufactured products.  Likewise, we have included special language in our free trade agreements to allow U.S.-made remanufactured goods to qualify for tariff free access. 

As noted above, there are a lot of economic and environmental benefits from opening up trade in remanufactured goods. Remanufacturing represents a huge possibility for job growth. In the United States alone, there are estimates that more than 73,000 firms specialize in remanufacturing, and most of them are small and medium-sized businesses, with a few larger multinational corporations mixed in. Some sources claim these firms are growing at 20-30 percent per year. Remanufacturing is also relatively labor intensive. Remanufactured goods require the original good to be disassembled, cleaned and remade by skilled labor. Overall, remanufacturing employs more skilled labor per good produced than traditional manufactured goods.

There are also huge environmental benefits. A remanufacturer can use 85 to 95 percent less energy and materials per unit produced than a new equipment manufacturer because the reused “cores” retain the energy and materials from their original production.  Global estimates of energy saved through remanufacturing equals about 120 trillion BTUs (British Thermal Units) a year.  In simple terms, that’s about equal to:

  • 10.8 million barrels of crude oil or 233 oil tankers
  • The lifetime fuel consumption of 75,000 car owners
  • The electricity generated by five nuclear power plants every year!

By reusing much of the material in the core of an old product, businesses can avoid additional waste from finding its way into landfills, and save the harm of removing new raw materials from the earth and also reduce demands on increasingly valuable water resources.  This is truly “Reduce, Reuse, Recycle” in action.  By preserving the energy, materials and water from original production of reused core inputs, remanufacturing provides access to the same high quality goods at lower prices.  Because the input costs for remanufactured goods are lower than a new good, it means remanufactured goods can be priced much cheaper than new goods.  

Global demand for products is rising quickly thanks to a growing middle class in developing countries. Because of this, the cost of raw materials is sky-rocketing. Remanufacturing can provide a way to produce the same high-quality goods we’re used to for a fraction of the cost, and save the environment at the same time. There’s already been huge growth in the remanufacturing sector, along with a lot of good-paying jobs. Bringing down trade barriers will only help create jobs, and help us create a more sustainable economy.

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Asia Pacific Business Outlook: Twenty Five Years and Many More Opportunities

March 27, 2012

This story is part of an ongoing series highlighting the information available to participants in the 2012 Asia Pacific Business Outlook (APBO)

Francisco Sánchez is the Under Secretary of Commerce for International Trade

This is my second year keynoting the 25-year old USC Marshall School’s Asia Pacific Business Outlook (APBO) Conference. It was great to see the diversity of participants, from representatives of businesses across the United States, as well as non-profit organizations, chambers of commerce, and trade associations from both the United States and countries in Asia and Latin America.

Under Secretary of Commerce for International Trade Francisco Sánchez speaks during the APBO Conference

Under Secretary of Commerce for International Trade Francisco Sánchez speaks during the APBO Conference (Photo USC Marshall School of Business)

It seems as though it’s also a reunion and convergence of sorts of 16 Senior Commercial Officers (SCOs) from Asia and local Commercial Service trade specialists. For the first time, we have the SCOs from Brazil and Russia joining the conference, contributing their insider knowledge and providing market briefings in one-on-one counseling sessions.

During my address yesterday, I was able to outline our ongoing priorities here at the International Trade Administration and across the Obama Administration as well as provide updates on some major accomplishments achieved in the past few years.

This month marks the two-year anniversary of the President’s National Export Initiative and good things are happening. Last year, U.S. exports surpassed $2 trillion for the first time in history. They supported nearly 10 million jobs, an increase of more than a million when compared to 2009 numbers. So the formula is pretty clear: exports benefit jobs, businesses and the national economy. That’s why we’ve got to continue to increase U.S. exports.

One of the areas with the greatest potential for this work is the Asia-Pacific region. It represents 55 percent of global GDP and accounts for 44 percent of world trade. And all of us at the Commerce Department are committed to keeping the U.S.- Asia-Pacific partnership growing — both through our words and our work.

Last year, I led the largest-ever higher-education mission to Indonesia and Vietnam. I visited Hong Kong and China last fall. And, earlier this month I was in Japan and Vietnam a second time to advance commercial relations. Our work in this region is a priority for us. And good things are happening.

U.S. goods exports to the broader Asia-Pacific totaled nearly $900 billion in 2011, a 15 percent increase from 2010. This is equal to 60 percent of total U.S. goods exports to the world. This partnership is generating benefits for all sides. This means jobs and growth for the American economy. In turn, U.S. products and services are helping to fuel the economic development in the Asia Pacific.

These have been win-win partnerships. Now, we’re focused on producing even more wins. To do this, the Administration is working from the policy level to the community level. For instance, one win came recently when the U.S.- Korea Trade Agreement took effect.

Before, in a variety of sectors, U.S. companies had to pay a tariff rate to sell their goods and services in Korea. Now, many of these same companies can enter the market duty-free. Almost 80 percent of American exports of industrial products to Korea will enter without getting taxed. Estimates are that this will lead to roughly $11 billion in additional U.S. exports. It will also provide new opportunities in the 12th largest economy in the world. That’s a big win.

Another win involves the Trans-Pacific Partnership. As many of you know, it’s an ambitious, high-standard trade agreement for doing business in the Asia-Pacific. It seeks to address new and emerging trade issues and 21st-century challenges. Working with our colleagues at the Office of the United States Trade Representative — we are addressing traditional trade issues involving goods and services;  rules on intellectual property; and technical barriers to trade. And we are making progress. A TPP framework was agreed to in Honolulu at the APEC Leaders’ meeting in November. It was a landmark accomplishment. The agreement identified five central features that nations around the world are already viewing as a new standard for trade agreements.

The Commercial Officers from across Asia, Russia and Brazil as well as the domestic trade specialist stand ready to help U.S. businesses explore the possibilities that are out there. There were some great conversations today.
This is a chance to achieve common goals, such as creating more markets and customers for U.S. businesses, which can lead to more sales, which will boost U.S. exports, which supports jobs and strengthens the American economy. These are big goals that will make a big impact.

And I look forward to working with all of you in the years ahead to achieve these goals.

So let’s get the conversation started.

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